With a long leasehold property in Ettington, you are actually purchasing an entitlement to live in a property for a prescribed time frame. In recent years flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a lengthy period of time, you may think about extending the lease sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly particularly when there are fewer than eighty years remaining. Anyone in Ettington with a lease nearing 81 years remaining should seriously consider extending it as soon as possible. When the lease term has fewer than eighty years left, under the relevant statute the freeholder can calculate and demand a larger premium, based on a technical computation, strangely termed as “marriage value” which is payable.
It is generally considered that a property with in excess of one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 30 years left, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Chelsea Building Society | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with handle Ettington lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
Trailing protracted negotiations with the landlord of her first floor apartment in Ettington, Lydia commenced the lease extension process as the eighty year threshold was quickly coming. The legal work completed in June 2012. The freeholder’s costs were negotiated to slightly above 600 GBP.
Mr and Mrs. K López acquired a garden apartment in Ettington in April 2006. We are asked if we could estimate the premium would be to extend the lease by a further 90 years. Identical flats in Ettington with a long lease were valued around £200,800. The average amount of ground rent was £65 collected monthly. The lease end date was in 2086. Given that there were 60 years remaining we estimated the premium to the freeholder for the lease extension to be within £20,900 and £24,200 plus costs.
In 2010 we were called by Dr S Lambert who, having took over the lease of a studio apartment in Ettington in February 2009. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be to prolong the lease by a further 90 years. Comparative flats in Ettington with a long lease were worth £260,000. The mid-range amount of ground rent was £50 billed quarterly. The lease concluded on 16 April 2097. Given that there were 71 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 not including costs.